(Kitco News) – Crypto prices pared back some of their recent gains in trading on Thursday as the threat of interest rate hikes popped back on the radar of investors following a better-than-expected unemployment report from the U.S. Labor Department.
Also adding pressure to markets was the S&P Global Purchasing Managers Index (PMI) for May, which came in at 54.4 versus 51.3 last month. The higher-than-expected reading showed business activity accelerated at the fastest pace in two years despite the Fed's efforts to subdue price pressures.
After starting in the green, stock prices fell into the red following the report and remained underwater all day, with the S&P, Dow, and Nasdaq ultimately closing down 0.74%, 1.53%, and 0.39%, respectively.
Data provided by TradingView shows that after climbing to support at $70,000 in morning trading on Thursday, Bitcoin (BTC) took the elevator down several levels, hitting a low of $66,280 before being pushed back above $66,700.
BTC/USD Chart by TradingView
At the time of writing, BTC trades at $66,745, a decrease of 2.45% on the 24-hour chart.
Analysts warn about reaction to Ether ETF approval
One of the main sources of momentum for Bitcoin and the crypto market in recent weeks was speculation about the approval of the first spot Ethereum (ETH) exchange-traded funds in the U.S. According to ETF analysts for Bloomberg Intelligence, the odds of an approval jumped from 25% to 75% on Monday based on requests to update their applications that the Securities and Exchange Commission sent out to issuers.
The development helped spark a rally in the crypto market that saw Ether’s price surge 24% to $3,900, but sentiment has since moderated as it could still be months before an Ether ETF would start trading, even if approved on Thursday.
Amid the Thursday afternoon drawdown for Bitcoin and the broader crypto market, market analyst Skew said it’s “No surprise to see a pullback into such a big event which lifted the market as well in anticipation.”
He said the “Current area is super important but flows will be pretty erratic since big events provide more volatility,” and suggested that traders keep an eye on the “weekly open of $66,247, the previous 4H supply zone (current price),” an look for a “reaction [from the market] that proves a reclaim.”
Skew added that the 4-hour and 1-day exponential moving averages show support is around $65,000.
Crypto Tony said that $67,300 is the “level for the bulls to hold this week,” before adding that the option to continue holding remains good as long as it holds above $64,500.
Market analyst Rekt Capital said that Bitcoin is “just consolidating inside its Re-Accumulation Range,” and noted that Thursday’s price action was merely a “rejection at the Range High Resistance.”
“Historically, Bitcoin has never been ready to breakout from a Re-Accumulation Range this soon after the Halving,” he said.
And for those wondering when Bitcoin could see its next peak, technical analyst Yoddha said historical performance suggests that “BTC will hit the Top within the next 300 days.”
#Bitcoin has been consolidating in the current range from the past 84 days
IMO from the current price, BTC will hit the Top within the next 300 days pic.twitter.com/CmZTqWCeOW— Yoddha (@CryptoYoddha) May 22, 2024
Altcoins slide into the red
Most altcoins in the top 200 drifted lower in trading on Thursday, with roughly 30 tokens recording gains while the rest saw losses.
Daily cryptocurrency market performance. Source: Coin360
ConstitutionDAO led the field for a second day with a gain of 26.4%, followed by an increase of 20.1% for ether.fi (ETHFI), and a gain of 7.7% for Manta Network (MANTA). Arkham (ARKM) was the biggest loser, falling 12.5%, while Axelar (AXL) dropped 11.6%, and Echelon Prime (PRIME) lost 11.1%.
The overall cryptocurrency market cap now stands at $2.51 trillion, and Bitcoin’s dominance rate is 52.9%.
